Bus Franchising: an important tool for delivering integrated transport systems or white elephant?

Buses play a fundamental role in creating and maintaining a fully integrated transport system. Bus patronage has steadily declined since the 1960s, despite buses being the dominant mode of public transport. Although buses have the potential to be a dynamic asset for local authorities – pulling together the various strands of an integrated public transport network – declining bus patronage means that potential is not being realised, leaving communities isolated and reliant on private car use.

The Scottish Parliament last year passed the Transport (Scotland) Act 2019. Like the English Bus Services Act 2017, the 2019 Act empowers local authorities to take steps to improve the provision of bus services. The 2019 Act goes further than the 2017 Act, permitting local authorities to provide bus services directly, set up Bus Services Improvement Partnerships and create Local Services Franchises.

Franchising can provide an effective solution for local authorities seeking to improve local bus services; it affords control over the service but preserves competition between operators at the tender stage. This control allows public authorities to plan future projects (like upcoming housing schemes) around available road infrastructure in the knowledge that bus services will be provided, rather than relying on private operators launching new services. Franchising also affords control over the type of vehicles being operated, supporting the roll-out of battery and/or hydrogen powered fleets.

But no franchise contracts have yet been awarded in England. This may be partly due to the process for establishing a franchise set out in the detailed guidance. Local authorities must undertake an expensive and complex consultation and assessment process, comparing franchising to other solutions available under the Transport Act 2000 (including partnerships), before they can take the decision to launch a franchise. At any point during this process, an operator may intervene and make a new partnership offer. If this partnership offer has not been part of the assessment process, the local authority must give due consideration to the offer, before making an "appropriate decision," or risk judicial review. This in practice means large amounts of money spent considering franchising believing that a partnership solution was unavailable, is at risk throughout. Not an option for most authorities whose primary objective is simply to find the best way to deliver their vision for bus.

In contrast, in the telecoms sector, although authorities must undertake a public consultation before seeking to procure broadband connectivity, they must only take into account telecoms providers' proposals during the specific public consultation window. If providers say nothing during this period but subsequently state that they will provide connectivity to certain premises, this does not affect what the authority is entitled to procure.

Buses are critical to the future of public transportation in the UK and to supporting commitments to decarbonisation and inclusion. When drafting its own regulations in the coming months, the Scottish Government should consider the issues highlighted with the English guidance to ensure bus operators fully engage early with local authorities on partnership proposals. If workable partnerships are not proposed at this stage, local authorities must be in a position to develop their franchise plans with confidence as otherwise what should be a useful mechanism could become another white elephant.

Suzanne Moir is Infrastructure, Projects and Energy Partner at Addleshaw Goddard